BILL ANALYSIS
AB 2198
Page 1
Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chair
AB 2198 (Cook) - As Amended: April 5, 2010
SUBJECT : Tribal gaming: local agencies.
SUMMARY : Appropriates $30 million from the Indian Gaming
Special Distribution Fund (SDF) to restore funds that were
deleted from the Budget Act of 2007. Specifically, this bill :
1)Appropriates $30 million from the SDF to restore funding
deleted from the Budget Act of 2007 for the purpose of
providing grants to local government agencies impacted by
tribal gaming. The funds would be allocated by the California
Gambling Control Commission (CGCC) for local projects.
2)Makes findings and declarations relating to state law that
appropriated $30 million from the SDF the CGCC for local
government agency grants that mitigate the impacts of tribal
gaming.
EXISTING LAW :
1)Creates in the State Treasury the Indian Gaming Special
Distribution Fund for the receipt of revenue received by the
state from Indian tribes pursuant to the terms of specified
tribal-state gaming compacts (primarily the 1999 compacts).
Executive Order D-66-03 authorizes and requires the California
Gambling Control Commission to collect and account for all SDF
contributions under the tribal-state gaming compacts. These
moneys are available for the following purposes:
a) Grants, including administrative costs, for programs
designed to address gambling addiction.
b) Grants, including any administrative costs, for the
support of state and local government agencies impacted by
tribal gaming.
c) Compensation for regulatory costs incurred by the
California Gambling Control Commission and the Department
of Justice in connection with the implementation and
administration of tribal-state gaming compacts.
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d) Payment of shortfalls that may occur in the Indian
Sharing Revenue Sharing Trust Fund (RSTF).
e) Disbursements for the purpose of implementing the terms
of tribal labor relations ordinances promulgated in
accordance with the terms of specified tribal-state gaming
compacts ratified pursuant to existing law.
f) Any other purpose specified by law.
2)Establishes priority for funding from the SDF is in the
following descending order:
a) An appropriation to the RSTF sufficient to make payments
of any shortfalls that may occur in the RSTF.
b) An appropriation to the Office of Problem and
Pathological Gambling within the State Department of
Alcohol and Drug Programs for problem gambling prevention
programs.
c) The amount appropriated in the annual Budget Act for
allocation between the Department of Justice and the
Commission for regulatory functions that directly relates
to Indian gaming.
d) An appropriation for the support of local government
agencies impacted by tribal gaming.
3)Establishes a method of calculating the distribution of
appropriations from the SDF for grants to local government
agencies impacted by tribal gaming. This method includes a
requirement that the State Controller, in consultation with
the Commission, deposit funds into County Tribal Casino
Accounts and Individual Tribal Casino Accounts based upon a
process that takes into consideration whether the county has
tribes that pay, or not pay, into the SDF. The distribution
formula "sunsets" on January 1, 2021.
4)Establishes Indian Gaming Local Community Benefit Committees
with specified local government and tribal representation that
are responsible for establishing SDF grant application
policies and procedures, determining grant eligibility, and
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selecting grants from Individual Tribal Casino Accounts or
County Tribal Casino Accounts based on "nexus test criteria"
that mainly takes into consideration the geographical
proximity of an applicant local government jurisdiction to the
tribal casino.
a) All grants from Individual Tribal Casino Accounts are
required to be made only upon the affirmative sponsorship
of the tribe paying into the SDF from whose Individual
Tribal Casino Account the grants are available for
distribution.
b) Priority uses for the receipt of grant money from
Individual Tribal Casino Accounts are as follows: law
enforcement, fire services, emergency medical services,
environmental impacts, water supplies, waste disposal,
behavioral, health, planning and adjacent land use, public
health, roads, recreation and youth programs, and child
care programs.
5)Creates in the State Treasury the RSTF for the receipt and
deposit of moneys derived from gaming device license fees that
are paid into the fund pursuant to the terms of specified
tribal-state gaming compacts for the purpose of making
distributions to non-compact Tribes (i.e.,
federally-recognized non-gaming and tribes that operate
casinos with fewer than 350 slot machines). Revenue in the
RSTF is available to the California Gambling Control
Commission, upon appropriation by the Legislature, for the
purpose of making distributions of $1.1 million annually to
non-compact tribes.
FISCAL EFFECT : Unknown.
COMMENTS : Background . The Indian Gaming Special Distribution
Fund (SDF) was created by the 1999 TribalState Compacts and is
currently financed by 21 tribal governments that operated more
than 200 gaming devices as of September 1, 1999.
In accordance with the 1999 TribalState Compacts, the SDF
provides funding for nongaming tribes, local governments, and
special districts impacted by tribal government gaming, gambling
addiction programs, and reimbursement to the Division of
Gambling Control and the California Gambling Control Commission
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for regulatory costs.
Priorities for disbursements to local governments include the
following: local law enforcement, fire and other emergency
services, environmental impacts, water supplies, behavioral
health, land use, public health, roads, recreation, and youth
and childcare programs.
Author says, for example, tribal governments in Riverside, San
Bernardino, and Santa Barbara counties have paid over $500
million into the SDF.
In recognition of the unique governmenttogovernment relationship
between tribes and the State of California, the 1999 Compacts
require tribal governments be consulted in the process of
identifying purposes for grants made to local governments.
In 2003, the Tribal Alliance of Sovereign Indian Nations (TASIN)
sponsored legislation to establish a mechanism and formula for
appropriating SDF monies for their intended purposes.
Restoring fund from Budget Act of 2007 . Tribal governments
would like to restore funding from "the lost year" that was
vetoed by the governor in the 2007/08 budget. In the 2007/08
fiscal year, Gov. Schwarzenegger vetoed an appropriation for
local governments totaling $30 million, citing a Bureau of State
Audits report that some local governments were not using funds
in accordance with their sole intended purpose. The Governor
requested reforms to the SDF funding process before restoring
the vetoed funds.
In 2008, the Legislature passed and the Governor signed into law
AB 158 (Torrico), enacting several recommendations from the
Bureau of State Audits to help ensure grant funds be spent for
their intended purposes.
Local governments' relationship with tribal governments
regarding the SDF . Tribal governments continuing to pay into
the SDF would like to ensure that payments to local governments
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continue. Proposals have been made to revisit the SDF formula
and ensure tribal governments that continue to pay into the fund
receive 30% of total SDF payments for their surrounding
communities.
Indian Gaming Special Distribution Fund's solvency . If the SDF
continues to fund both Revenue Sharing Trust Fund (RSTF)
backfills and local government grants, the potential exists that
the SDF will become insolvent in future years. The Legislative
Analysts Office projects the SDF would have a fund balance of
$197 million at the end of 200809 equal to about seven years of
proposed expenditures from the fund during the budget year."
Since 2003, payments to the State under new or amended compacts
have shifted away from the SDF to the General Fund, resulting in
a decline of payments into the SDF from approximately $147
million to $49 million annually.
The 2008/09 governor's proposed budget attempted to direct $40
million from the 2006 Amended Compacts (Agua Caliente, Morongo,
Pechanga, and San Manuel) payments to make up projected
shortfalls under the RSTF; the Legislative Analyst's Office and
the Legislature rejected the proposal in order to avoid reducing
general fund revenues.
Indian Gaming Special Distribution Fund Payment Fee Schedule .
Payments into the SDF are based upon this fee schedule
established by the 1999 Tribal-State Compacts.
-----------------------------------------
|Number of |Percent of Average |
|Terminals | |
| | |
|----------------+------------------------|
|Quarterly |Gaming Device Net Win |
|Device Base | |
|----------------+------------------------|
|1-200 |0% |
|----------------+------------------------|
|201-500 |7% |
|----------------+------------------------|
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|501-1000 |7% applied to the |
| |excess over 200 |
| |terminals, up to 500 |
| |terminals, plus 10% |
| |applied to terminals |
| |over 500 terminals, up |
| |to 1,000 terminals. |
|----------------+------------------------|
|1000+ |7% applied to the |
| |excess over 200 |
| |terminals, up to 500 |
| |terminals, plus 10% |
| |applied to terminals |
| |over 500 terminals, up |
| |to 1,000 terminals, |
| |plus 13% applied to the |
| |excess above 1,000 |
| |terminals. |
-----------------------------------------
Indian Gaming Special Distribution Fund Contributing Tribes .
The following is a current list of tribes who contribute to the
SDF:
1)Barona Band of Mission Indians
2)Big Sandy Band of Mono Indians
3)Big Valley Rancheria
4)Bishop Paiute Tribe
5)Cabazon Band of Mission Indians
6)Cahuilla Band of Indians
7)Chicken Ranch Rancheria
8)Colusa Indian Community
9)Hopland Band of Pomo Indians
10) Jackson Rancheria Band of Miwuk
Indians
11) Mooretown Rancheria
12) Redding Rancheria
13) Robinson Rancheria
14) Santa Rosa Rancheria
15) Santa Ynez Band of Chumash
Indians
16) Soboba Band of Luise?o Indians
17) Sycuan Band of Kumeyaay Indians
18) Table Mountain Rancheria
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19) Tule River Indian Tribe
20) Twenty-Nine Palms Band of
Mission Indians
21)Tyme Maidu Tribe Berry Creek Rancheria
Prior legislation . SB 357 (Ducheny, Chapter 181, Statutes of
2009) extends the sunset date to January 1, 2021 for the law
governing the method of calculating the distribution of
appropriations from the Indian Gaming Special Distribution Fund
for grants to local government agencies impacted by tribal
gaming.
AB 158 (Torrico, Chapter 754, Statutes of 2008) enacts several
recommendations proposed by the State Auditor relative to the
allowable allocation and uses of grants to local government
agencies to mitigate the impacts of tribal gaming in local
jurisdictions.
AB 2353 (Garcia, 2008 Legislative Session) would have
appropriated $30 million from the Indian Gaming Special
Distribution Fund to provide grants to local government agencies
impacted by tribal gaming. Held on the Assembly Appropriations
Committee suspense file.
AB 132 (Garcia, 2007 Legislative Session) would have enacted
several recommendations proposed by the State Auditor relative
to the allocation and uses of proceeds from the Indian Gaming
Special Distribution Fund, and appropriates $30 million from the
Indian Gaming Special Distribution Fund to augment grants
provided to local government agencies in the Budget Act of
2007-2008. Never heard in Assembly Governmental Organization
Committee.
AB 673 (J. Horton, Chapter 210, Statutes of 2003) provides for
allocation of funds from the Indian Gaming Special Distribution
Fund for the purpose of backfilling shortfalls in the Indian
Gaming Revenue Sharing Trust Fund, and for a problem gambling
prevention program.
SB 621 (Battin, Chapter 858, Statutes of 2003) establishes
priorities and procedures for funding to local governments from
the Indian Gaming Special Distribution Fund for the purpose of
mitigating impacts from tribal casinos.
REGISTERED SUPPORT / OPPOSITION :
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Support
California Nations Indian Gaming Association
California State Sheriffs' Association
City of Palm Springs Fire Department
City of Palm Springs Police Department
League of California Cities
Safety Employees' Benefit Association of San Bernardino
San Bernardino County Sheriff's Department
Santa Ynez Band of Chumash Indians
Tribal Alliance of Sovereign Indian Nations
Opposition
None on file
Analysis Prepared by : Rod Brewer / G. O. / (916) 319-2531